Broken Government

Published — December 10, 2008 Updated — May 19, 2014 at 12:19 pm ET

“McCain-Feingold” fails to solve campaign finance problem

New campaign reform act replaces the problem of unlimited “soft money” contributions with the problem on weakly regulated independent committees


On March 27, 2002, President George W. Bush quietly signed the Bipartisan Campaign Reform Act of 2002, commonly known as “McCain-Feingold” or “Shays-Meehan,” but a major loophole in the legislation effectively replaced one problem with another. The bill banned “soft money” — a type of unlimited contributions from individuals, committees, and corporations to national political parties and candidates — but left in place a weak enforcement system that has resulted in little regulation of contributions to independent committees, including so-called 501(c)(4) and 527 groups. With large donors no longer permitted to donate millions of dollars to the national parties, wealthy activists on both sides began to create external groups that drew more and more of the political contributions — groups such as America Coming Together, the Progress for America Voter Fund, Swift Boat Veterans and POWs for Truth, and the Voter Fund. The Federal Election Commission’s (FEC) slow, deliberative investigative process appeals to the independent groups, enabling them to have a major impact during the election cycle while risking only after-the-fact legal action. These tax-exempt groups raised large amounts of money from supporters, spent millions of dollars on advertising, and ultimately were fined hundreds of thousands of dollars by the FEC — but not until more than two years after the election, when the groups had largely ceased their activity. Paul S. Ryan of the nonpartisan Campaign Legal Center told the Center that under the current system, he finds it “difficult to envision these groups seeing fines as more than the cost of doing business.” And the proliferation continues. According to the Center for Responsive Politics, national 527s spent and raised roughly $200 million in the 2008 election cycle. The result for the nation: big political campaigns where those with the most money have the loudest megaphones.

Read more in Money and Democracy

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